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Hot Topic NBR Focus: GMO
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Residential property market lost momentum in January

The residential property market lost momentum in January, according to Real Estate Institute of New Zealand data seen by economists.Some data for January was spotted by economists on the institute's website yesterday and has since been taken down. The ins

NZPA
Thu, 11 Feb 2010

The residential property market lost momentum in January, according to Real Estate Institute of New Zealand data seen by economists.

Some data for January was spotted by economists on the institute's website yesterday and has since been taken down. The institute said there was a technical hitch yesterday and it will release a full report at 10am tomorrow, including its house price index. It would not confirm today if the data seen by economists was final.

The median price of houses sold in January was $350,000, down 2.8 percent on December and up 7.7 percent year-on-year, according to a Goldman Sachs JBWere report on the data. In December the year-on-year rise was 9.6 percent.

Goldman Sachs JBWere is highlighting a downturn in the number of sales in January as evidence of a loss of momentum in the property market.

There were 4488 house sales in January, down 17 percent on the previous month and down 1 percent year-on-year. Sales turnover had fallen over 31 percent during the past six months, taking the level close to the depressed lows hit over 2008.

"House sales tumbled in January and are now close to the lows hit over 2008," Goldman Sachs JBWere New Zealand economist Philip Borkin said.

"The housing market has lost momentum rather quickly, again highlighting the fragile nature of the recovery to date."

He said the weak housing turnover raised concerns about the sustainability of the economic recovery. The data suggested the possibility of the economy experiencing another dip over 2010.

"While there is some merit in the view that the housing market is still being held back by a lack of quality properties listed for sale (prices still reasonably elevated, days to sell below historical averages, but turnover very weak), we suspect that increases in fixed mortgage rates over the past few months has dented optimism. Nevertheless, on the back of these numbers, we would expect to see house price growth ease over the coming months."

Seasonally adjusted days to sell remained unchanged at 35.8 days in January.

NZPA
Thu, 11 Feb 2010
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Residential property market lost momentum in January
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